If Opencoin spends all it's XRP and fails, then yes, the network will probably continue without it. But how could Opencoin fail with such a large endowment ? I'm much more worried that the majority of coins in existence will continue to be held by Opencoin for the foreseeable future and will act as a sword of Damocles over the currency. They will have practically unlimited power and thus could act as a proxy for other entities, such as world governments.
There are only a few outcomes, and they can all be enumerated:
Q: Can OpenCoin hoard all the XRPs?
A: Yes, but if XRPs become too scarce then nodes will use the consensus algorithm to lower the XRP fees and reserve requirements.
Q: What if OpenCoin sells all it's XRPs at once?
A: There is little incentive to do that, since the price would crash and OpenCoin would make less money. Even so, the result would be similar to recent Bitcoin crashes. Mass panic, and then the price recovering. But OpenCoin could only do this once. After that, the market will set the price. The core Ripple functionality of sending fiat-denominated IOUs securely to anywhere on the planet would be largely unaffected.
Q: How should OpenCoin sell the XRPs?
A: To maximize profit from XRPs sales, OpenCoin needs to carefully maintain the price of XRP. They don't want to sell too much XRP at once since that would lower the price and reduce their profits. But they also don't want too sell too little. OpenCoin will likely sell just enough XRPs so that their scarcity does not slow down adoption of the system.
Once the give-aways are all over, the only way for a new user to create a Ripple wallet will be to either buy the reserve XRPs directly from a gateway, or to have the gateway subsidize the reserve requirement as part of the marketing costs of acquiring a new customer. Should OpenCoin sell too few XRPs, the cost for gateways to acquire new customers will exceed the expected return. At this point, there will be strong pressure for all participating nodes to vote to reduce the reserve requirement. If this vote is successful it would instantly liberate some amount of XRPs that were previously sequestered as reserves, thus reducing the price of XRP and also OpenCoin's future profits.